Friday, July 15, 2005

FLAGSTAFF, Ariz. - The Mohave Generating Station - from which both the Hopi Tribe and Navajo Nation derive significant income - may be in serious trouble.

The plant's majority owner, Southern California Edison, filed its monthly report on Mohave with the California Public Utilities Commission updating progress on coal and water negotiations, C-aquifer studies, and an alternatives investigation.

The 35-year-old 1,580 megawatt coal-fired plant, one of the biggest air pollution emitters in the country, uses Navajo and Hopi coal mined on Black Mesa by Peabody Coal. The coal goes to the generating station via a coal slurry pipeline that uses more than 4,000 acre-feet a year of potable water pumped from the N-aquifer, the sole source of drinking water for the Hopi Tribe and the Navajos living on Black Mesa.

On Dec. 2, 2004, the CPUC decided not to authorize the installation of the pollution control equipment required by a 1999 federal consent decree resulting from a lawsuit brought against Mohave by environmental groups. According to the decree, Mohave must shut down at the end of 2005 if the pollution control equipment is not in place.

The CPUC decision concluded a two-year proceeding that involved hundreds of comments from Black Mesa residents and arguments from the grassroots organizations Black Mesa Trust and To' Nizhoni Ani, as well as other interveners, including the Natural Resources Defense Council and the Sierra Club. The principal stakeholders were the Hopi Tribe, the Navajo Nation, Peabody Coal, and Mohave owners.

In addition to installing $1.1 billion worth of pollution control equipment, upgrading the failing coal slurry pipeline and retrofitting the power plant, the CPUC decision focused on two other critical points. The first was the Hopi Tribe and the Navajo Nation's resolve that Peabody stop using the N-aquifer as a source of water for the coal slurry. The second was that royalties from Black Mesa Mine - the sole supplier of coal to Mohave, which in turn is the mine's only customer - provide a substantial portion of the revenues on which the Hopi and Navajo governments depend. The Hopi Tribe stands to lose one-third of its budget, or roughly $7 million, when the power plant shuts down.

The CPUC decision required SCE to commission a study of the C-aquifer underlying a large part of northern Arizona as a source of water for the coal slurry and authorized a study of alternative sources of power generation to replace Mohave-generated electricity and to help the tribes recoup some of their financial losses from the plant's closure.

The C-aquifer

The C-aquifer study is, after some initial difficulties, now moving forward. The report read: ''All data obtained from the C-Aquifer test pumping has now been compiled by the U.S. Geological Survey. From the USGS's preliminary report on the test data, SCE understands that the C-aquifer water in the proposed Canyon Diablo well-field area [on land purchased by the tribes] is expected to be of adequate quality, and the wells are expected to be capable of producing at an adequate rate, for the proposed project.''

The USGS model of the C-aquifer has run into some calibration difficulties, which it is resolving. A ''flow model'' of the C-aquifer is being conducted by SS Papadopulos & Associates and is expected by this fall.

Three points of contention have been raised regarding the studies. The most thorny point is that the Bureau of Reclamation, which owns part of Navajo Generating Station in Page, Ariz., was in charge of drilling the test wells and collecting the pumping data. Since NGS also gets its coal from a Peabody mine on Black Mesa, critics suggest that Reclamation has an interest in keeping those mines open and therefore should not have conducted any part of the C-aquifer study.

The second point of disagreement is whether the models being used by USGS are accurate, even leaving aside the issue of calibration.

And the third is that the studies do not take into account the impact of pumping the C-aquifer for mining - and the roughly 5,500 acre-feet per year that the tribes want for municipal use from the well field - will have on other users of the aquifer, which include several towns and cities.

The report also states, as did the five prior reports, that confidential post-2005 coal and water supply negotiations among the tribes, Peabody, and Mohave owners are continuing.

Office of Surface Mining

Peabody has submitted a new mining plan for Black Mesa Mine, asking the Office of Surface Mining to combine the two mines under one permit. Black Mesa has been operating on a ''temporary'' permit for more than two decades, largely because the issue of using N-aquifer water for the coal slurry has been in contention ever since the mine opened.

Many Hopi elders maintain that the village leaders never gave permission for the sale of coal and water; therefore, the leases are invalid. The validity of the leases were further impugned with the discovery that the attorney who represented the Hopi Tribe in the original 1960s lease negotiations was working for Peabody at the same time.

This report also stated that OSM will have a draft environmental impact statement on the Peabody application by January or February of next year, less than one year since public scoping meetings were held on the reservations and in Flagstaff.

The firm of Sargent & Lundy has been retained by SCE to conduct the Mohave Alternatives/Complements Study process.

One of the two major forces working against reopening Mohave regards the consent decree. All along, Peabody and the tribes have maintained their confidence that the plaintiffs in the lawsuit - Sierra Club, Grand Canyon Trust and National Parks and Conservation Association - would agree to extend the Dec. 31 deadline for installing the pollution control equipment.

SCE informed the commission that in a May 25 letter, the plaintiffs informed Hopi Tribal Chairman Wayne Taylor Jr. and Navajo Nation President Joe Shirley Jr. that they do not support changing any aspect of the decree, including the deadline.

Secondly, Peabody has informed SCE that it will begin ''ramping down'' its activities at Black Mesa Mine in October because there is sufficient coal stored at Mohave and ''in the works'' to keep the power plant fueled until the end of the year. Peabody anticipates that it will send out the first termination notices to mine workers at the beginning of August.

Lobbyist worked with Jack Abramoff

In addition to the energy generation alternatives study ordered by the CPCU and commissioned by SCE, the tribes themselves have been looking at other power generation options, including wind, solar and coal.

A May 26 Hopi tribal press release described the tribe's meetings with Headwaters Corp. officials John Baird and John Ward, and the Department of Energy, to look at the possibility of constructing a coal liquefaction plant and electric generating plant ''on ranch lands own by the tribe.'' For the past eight years, the tribe has been using federal money awarded as part of the settlement of its land dispute with the Navajo Nation to purchase land in Flagstaff, ranch land south of Interstate 40 near Canyon Diablo and farm land near Yuma, Ariz.

The release read: '''We want to brief Energy Department officials on the proposed [memorandum of understanding] with Headwaters and find out what, if any funding might be available for clean coal technology projects on Indian lands,' said Kevin Ring, an attorney for Barnes & Thornburg and Hopi's Capitol Hill lobbyist.''

(The Energy Policy Act of 2005, versions of which have been passed by both the House and the Senate, has in it money for clean coal technology development and for the development of power generation facilities on Indian lands. Whether these provisions will survive the reconciliation process and final passage of the bill remains to be seen.)

Less than a week later, the tribe announced that its relationship with Ring was terminated.

The move came after Ring declined to answer questions put to him by the Senate Indian Affairs Committee during a hearing June 22, the third hearing held as part of the committee's investigation into the alleged fraud perpetrated on several Indian tribes by high-powered Washington lobbyists Jack Abramoff and Mike Scanlon.

According to the Hopi chairman's office, Ring was a lobbyist for the tribe for five years, which would be roughly from mid-1999 to mid-2005. During this period, the tribe, with the help of an unnamed lobbyist, entered into discussions with Reliant Energy to build a coal-fired power plant on Black Mesa. On March 22, 2002 the tribal council passed a resolution approving a joint development agreement with Reliant to explore the possibility of developing an electric generating plant on Hopi land.

In a KUYI Hopi radio forum on May 14, 2002, Taylor said, in response to a question about why Reliant was chosen to partner with the tribe on this project: ''Reliant Energy worked with same lobbyist we did in the state of Arizona. Our lobbyists know we have coal resources, and they were the ones who introduced us to Reliant.'' Neither former Vice Chairman Elgean Joshevama nor former Vice Chairman Caleb Johnson can confirm that Ring was the lobbyist with whom the tribe worked on the Reliant project; Johnson did say that the law firm involved was Greenberg Traurig, which has an office in Phoenix, and Ring worked for Greenberg Traurig in 2002.

The tribe pulled out of the Reliant partnership later in May 2002 due to public pressure and ''internal troubles'' the company was experiencing as a result of the 2001 California energy crisis.

Ring worked with Jack Abramoff at Preston Gates and then, beginning in 2002, at Greenberg Traurig. From 1998 - 2004, the Hopi Tribe paid Greenberg Traurig $700,000 - more than half of its total lobbying costs for that period, according to records on The Center for Public Integrity's Web site. Ring left Greenberg Traurig and moved to Barnes & Thornburg early in 2004.

The June 22 hearing focused on the lobbyists' dealing with the Mississippi Band of Choctaw Indians. The committee reiterated that the Choctaw were victims of fraud and were not accused of any wrongdoing.

Ring invoked his Fifth Amendment rights in response to questioning by Committee Chairman John McCain, R-Ariz. Some of those questions related Ring's club dues, were discussed in this exchange of e-mails:

Ring to Abramoff: April 24, 2001; Subject: help: ''Remember I talked to you about getting some help from a client to subsidize me joining a club. Well, I looked around and want to do the University Club. I already know some people there and they all think it is good for business.

''I know I can bill expenses I incur there, etc, but how can I get help with the $800 initiation fee? We are trying to join asap. Thanks.''

Sen. Russ Feingold (D-Wis.) will introduce a bill today that would radically overhaul the ways in which lobbyists and lawmakers interact with one another.

Feingold's bill would require more disclosure of meetings between lawmakers and lobbyists, curb privately funded travel, slow the revolving door between government service and lobbying, and raise the cost of traveling on private jets, according to talking points released by Feingold's spokesman.

Perhaps the most substantial change to current lobbying laws is a prohibition on former senators-turned-lobbyists from using the Senate gym or visiting current members on the Senate floor.

This is second time Feingold has played a leading role in pushing for changes to laws governing the way groups try to influence members and Congress. Along with Sen. John McCain (R-Ariz.), in 2002 he overcame opposition from Republican leaders to pass the biggest overhaul of campaign finance laws in 25 years.

McCain told The Hill earlier this week that he would wait to endorse a lobbying reform bill until he has concluded his last hearing of his investigation into how GOP lobbyist Jack Abramoff and his associate Michael Scanlon allegedly bilked several Indian tribes out of a reported $80 million. His next hearing is scheduled for later this summer.

Specifics of Feingold's bill include,

* Requiring lobbying disclosure reports to be filed quarterly rather than semi-annually.

* Requiring disclosure in the quarterly lobbying reports of grassroots lobbying, coalition lobbying and phone calls or in-person meetings with lawmakers, including the substance of those meetings.

* Lawmakers will have to sign a statement indicating that lobbyists are not paying for privately funded travel and pay the cost of charter airfare rather than just first class airfare when flying aboard private jets.

* A total gift ban and a $50,000 fine for violating the ban.

* Executive branch officials, lawmakers, and staff must wait two years instead of one year to lobby. And, they will be prohibited from contacting former colleagues in this time frame, as well as supervising a lobbying shop.

* Former lawmakers and staffers will be banned from contacting the entire Congress rather than just the former office in which they worked and, in their disclosure forms, they will have to indicate all former executive or legislative branch employment rather than just where they've worked in the past two years.

Reps. Rahm Emanuel (D-Ill.) and Marty Meehan (D-Mass.) have introduced similar legislation in the House.

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